Below is an option quote on IBM from the CBOE Web site showing options expiring in March and April 2022.

a. Which option contract had the most trades on that day?

b. Which option contract is being held the most overall?

c. Suppose you purchase one March 125 Call option. How much will you need to pay your broker for the option (ignoring commissions)?

d. Explain why the last sale price is not always between the bid and ask prices.

e. Suppose you sell one March 125 Put option. How much will you receive for the option (ignoring commissions)?

f. The calls with which strike prices are currently in-the-money? Which puts are in-the-money?

g. What is the difference between the March 115 Call option and the April 115 Call option?

Why is the second option more valuable?

h. On what date does the March 115 Call option expire? In what range must IBM’s stock price be at expiration for this option to be valuable?

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IBM (INTL BUSINESS MACHINES) February 21, 2022 @ 12:07 ET 123.66 -0.62 Bid 123.56 Ask 123.65 Size 1 x 6 Vol 4609212 Last Open Calls Net Bid Ask Vol Puts Sale Int Last Sale Net Bid Ask Vol Open Int 2022 Mar 18 Call 115.00 2022 Mar 18 Call 120.00 2022 Mar 18 Call 125.00 2022 Mar 18 Call 130.00 2022 Apr 14 Call 115.00 2022 Apr 14 Call 120.00 2022 Apr 14 Call 125.00 2022 Apr 14 Call 130.00 -1.00 -0.80 - -0.55 10.80 6.45 3.25 1.32 -0.39 1.23 1.35 11.55 -0.85 11.20 11.60 8.30 4.60 -0.72 10.30 10.65 6.35 6.60 11 43 2022 Mar 18 Put 115.00 1.12 0.15 1.08 188 311 2022 Mar 18 Put 120.00 2.09 3.20 3.30 713 677 2022 Mar 18 Put 125.00 3.85 2115 4721 2022 Mar 18 Put 130.00 6.81 5 25 2022 Apr 14 Put 115.00 1.88 7.45 7.75 - 226 2022 Apr 14 Put 120.00 3.15 4.40 4.65 59 211 2022 Apr 14 Put 125.00 5.09 0.71 1.16 239 4693 0.32 2.01 2.12 1361 3165 0.50 3.80 3.90 240 2186 0.76 6.80 7.00 1184 5210 0.22 1.81 2.17 700 1913 0.47 3.05 3.20 112 4.95 5.20 167 975 1411 2.49 -0.24 2.35 2.45 194 3702 2022 Apr 14 Put 130.00 7.90 0.85 7.75 7.95 160 967